Japan’s benchmark Nikkei average climbed 1% and the broader Topix index rose 1.2%, while Australian shares also gained.

Buffett, chairman of Berkshire Hathaway Inc , told shareholders in his widely read annual letter that he saw the need for “major acquisitions”, a sign stocks may be cheap.

In many parts of Asia, inflation and measures to combat it continue to dominate policymaking. Inflation is seen as one of greatest risks to the economic growth that has encouraged investment in Asian emerging markets, as much of Europe and other developed economies stagnate.

Chinese manufacturing growth slowed in February, according to an official survey, as the government’s sustained campaign to tame inflation weighed on industrial activity.

High global commodity prices complicated the task of monetary tightening, pushing a gauge of industrial input prices to a three-month high in China’s official purchasing managers’ index (PMI).

The overall PMI, which is designed to provide a snapshot of conditions in the manufacturing sector, fell to 52.2 in February from 52.9 in January, the China Federation of Logistics and Purchasing said.

“Inflation pressures are rising but economic activity is slowing. Slower economic growth is good for cooling inflation,” said Wang Hu, economist at Guotai Junan Securities in Shanghai.

China’s battle with inflation is a key market factor, and some foreign investors may favour Japanese stocks, analysts said.

“US and European investors have been the main players in the Japanese market. But Asian investors have joined in as Japan is one of the few countries with a low risk of rate hikes,” said Shun Maruyama, chief strategist at Credit Suisse.

“They are buying Japanese stocks on a process of elimination as Japan has more tolerance for higher oil prices than other Asian countries.”

Australia’s central bank kept interest rates steady on Tuesday for a fourth month, and said inflation looked set to remain within its preferred range all year, indicating it would not rush to raise them again.

In Indonesia, annual inflation slowed in February but at 6.84% stayed above the central bank’s target range of 4-6%.

Crude oil traded close to $120 per barrel last week, its highest in more than two years, largely on fears that political upheaval in Libya would spread across oil-producing nations in the Middle East, but Saudi Arabia calmed the market with extra supply.

Brent crude was steady around $112 per barrel, while US crude for delivery in April rose 45 cents to $97.41 per barrel. Gold , which in February recorded its biggest monthly gain since August as worried investors sought safety, was up around $3 to $1,413.60 per ounce.

The dollar index , which tracks its performance against a basket of major currencies, was steady at 76.951, not far from a 3-1/2 month low of 76.756.

The British pound hit its highest in four months versus the dollar, on expectations the Bank of England would raise rates, and that high oil prices would retard U.S. economic growth.

Investors are awaiting some key US economic events. This week will see Fed Chairman Ben Bernanke’s testimony at the Senate Banking Committee at 1500 GMT on Tuesday and US jobs data on Friday.